MRM Annual Report 2024

The accounts are finalized for Model Railway Magic Ltd’s company year from July 2023 to the end of June 2024. As with last year, I think it’s worth sharing a few notes alongside the official reports to reflect on the year.

I’ve kept similar headings as last year for simplicity.

This period marks our second full year operating Train Trax alongside Model Railway Magic’s second-hand business. It’s been a year of consolidating our strengths while also experimenting with new ideas and approaches.

People

I’m happy to report that customer satisfaction remains high, as reflected in our Trustpilot scores and eBay feedback. From this, we know that aspects like packaging, speed, and responsiveness matter to our customers, and they continue to tell us that we’re hitting the mark. This commitment to customer satisfaction aligns with our values under the Good Business Charter.

To maintain this high level of service during our busy holiday season, we hired Peter as a temporary assistant. It was fantastic to have an outside perspective from someone new to the modeling hobby, and his contribution was invaluable before he moved on to new ventures.

Toward the end of the financial year, we brought Keiren on board as a part-time team member. He’s focused on our second-hand business and also handles Train Trax customer queries by phone and email. His enthusiasm for all things on wheels, particularly his knowledge of Japanese railways, is infectious!

We’re also very pleased that Jonathan has remained with us throughout the year.

This year, we attended TINGS 2023, The Manchester Show, the York Easter Show, Model World Live at the NEC, and the NGS WWG convention (also in York). Although it was more shows than we’d initially planned, these opportunities allowed us to connect directly with customers, which was fantastic.

We also invested time in two valuable programs for the business. First, a government-funded innovation program led to some behind-the-scenes improvements in our technology and processes, as well as connections with other local businesses. Second, an accelerator program helped us refine our ‘Core Stories.’ Nico’s guidance through this process has been immensely beneficial, and you may have noticed some of the resulting material in our emails and social media posts.

Profit

Turnover for the year saw a significant increase, totaling around £415k. While overheads also rose, our profit before tax doubled as a percentage of turnover. We attribute this growth largely to an increase in online advertising spend, supported by a specialist agency.

The increased profit allowed us to pay down some debt and build a small reserve for the future. Corporation tax on profit will be paid in the UK, and VAT payments to HMRC are fully up-to-date. We paid all supplier bills on time, aligning with our commitment to the Good Business Charter, which we renewed this year.

Planet

We continued to meet the goals of our environmental policy across all areas. We’re still contributing to Stripe Climate, using recycled packaging, and relying on renewable energy for our web hosting. The model recycling program, where Model Railway Magic began, has grown thanks to Keiren’s role. Revenue from this part of the business has doubled, though it still represents a small part of the bigger picture.

Other Notes

Train Trax has been selling through its website and eBay for some time, and we experimented with expanding to Amazon Marketplace to reach more customers. After a trial period, we found that the extra fees and complications didn’t justify the returns, so we closed our Amazon storefront just before Christmas.

We also explored acquiring another business that would have complemented our offerings, but the seller withdrew at a late stage, despite our investment in travel and legal fees. We’ve learned valuable lessons for future opportunities.

Not all the shows we attended turned out to be commercially successful, which is why we’re likely to limit our presence to three shows per year. However, we do recognize the value of brand visibility beyond immediate sales.

Looking Ahead

Since the company’s end of year, we’ve taken over The Model Tree Shop, and we’re excited to bring it alongside our existing offerings. Developing this brand will be a focus over the next year, so profits may be limited in the short term due to this investment.

Additionally, we recently launched Hex-TRAK in partnership with JSModels. This venture has incredible potential, and we’re now engaged in international discussions about its future.

We’re always considering “what’s next,” though we’re mindful of the constraints of our size and finances. As stated last year, we welcome inquiries about business opportunities and partnerships.

Conclusion

I hope this summary of our business year is useful. It’s shared in the spirit of openness about what we’re up to and how we’re progressing. As the sole shareholder and director, I have the freedom to make my own mistakes and embed my ethics and values into the business. I also recognize that many customers and stakeholders share an interest in our success.